Corporate Power and Responsibility: The Commodification of Labour, Water and Health

Below is the abstract for an essay I wrote during the first term of the human rights MA at the Institute of Commonwealth Studies. While some of my views have changed slightly with regards to the recommendations I make in the conclusion, it seemed more appropriate to publish the original piece of research rather than amend it. The rest of the paper and the bibliography can be found in the comments section.

In a context of rapid economic globalisation the legal personification of corporations has resulted in the dehumanisation of people, negatively impacting on the realisation of their basic economic, social and cultural rights. This paper will begin by looking at how the demand for cheap goods and labour has resulted in an opportunity for transnational corporations (TNCs) to exploit workers so as to meet these demands. The impact on the realisation of their labour rights will be explored. The right to water and its flippant waste by TNCs internationally will then be considered. Finally gene patenting will be analysed to further demonstrate the impact of corporate power on the realisation of the right to health. These three issues are particularly interesting because they show how corporations impact negatively on the realisation of human rights relating to one’s livelihood (labour exploitation), what humans need to survive (water) and what the human body is made up of (genes). Legally binding obligations are necessary to regulate the actions of TNCs. Only when the global market has a ‘human face’ (Elson, 2004, p.60) will TNCs support rather than undermine the realisation of human rights (ibid.). The UN Global Compact is a step in the right direction but is not enough.

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Human rights discourse in the legal sense has traditionally focused on states as primarily responsible for protecting human rights. The legal obligations, outlined in the two international covenants protecting civil and political and economic, social and cultural rights, reiterate this (ICCPR and ICESCR). More recently, dialogue has referred to the role of transnational corporations (TNCs) as repeat offenders in violating human rights. Rapid economic globalisation, defined by Stiglitz as the ‘closer integration of the countries…through increased flow of goods and services, capital and labour’ (2006, p.4 in UNESCO, n.d) has enabled corporations to outsource labour and goods on an international scale. Cragg describes this as ‘enhanced corporate mobility’ (2000, p.7) which has resulted in the accumulation of vast economic and consequently, political power. The World Economic Forum, for example, found that of the 100 largest economic entities in the world, 51 are corporations and 49 are states (WEF, 2012.). National and international legislation has not kept up with this rapid growth by providing sufficient legal instruments to monitor human rights protection.

The construction of a corporation as a legal person has detrimental effects on the realisation of human rights, specifically those that are legally protected; labour rights, the right to water and the right to health. The universality and inalienability of these rights, as outlined in the preamble of the Universal Declaration of Human Rights, are not being respected by TNCs. This artificial personification of TNCs has led to the dehumanisation of those affected by the actions of such corporations. Milton Friedman defined an ‘externality’ as the third party in a transaction between two actors. This third party is an unconscious participant in the transaction. In the context of human rights, the human rights costs of a TNC’s pursuit to maximise profit are simply externalities. People become part of the cost-benefit analysis and are themselves considered an ‘externality’ in the process of profit maximisations- the only legal obligation of the directors (Friedman in Bakan, 2004, p. 61). The human face is removed and replaced by a value or number. This moral void has a detrimental effect on the realisation of human rights.

It is important to understand what is meant by the legal personification of corporations before outlining how that construction has led to the dehumanisation of people across the globe. Corporations have been granted similar legal rights to humans and a corporation is viewed in the eyes of the law as a distinct legal personality who can even claim rights under the 1998 Human Rights Act in the UK (Spencer, 2004, p.10). Limited liability, or the corporate ‘veil’, protects the individual shareholders and directors from individual responsibility. The fact that no individual can be held responsible for human rights violations committed by a corporation illustrates the power vacuum at the core of the corporation. Legal human rights protections are protecting the very actors who are committing human rights violations. Stevens considers this amorality in more detail suggesting corporations are just artificial social constructs (2012, p.60). Surely if state’s created these ‘mindless predators’ (Spencer, 2004, p.18), they can impose regulations and even deconstruct them if necessary?

LABOUR EXPLOITATION: THE VALUE OF TIME AND PRODUCTIVITY

While corporate power and labour exploitation are arguably inextricably linked, globalisation and the concurrent mobility of TNCs hinder the efficiency of state regulation. It is difficult to monitor the movements of TNCs when they work in a home country and several host countries and then sell their products and services internationally. The chain of supply becomes more complicated and Oberkofler questions how far down the chain one should go when investigating human rights abuses(2008, p.398)? Because there is little risk of being prosecuted for labour rights violations, due to the protection of the corporate veil and the fact that many TNCs operate in countries with less stringent labour rights standards, they need not take international standards into consideration and most won’t if it will be more costly (Forsythe, 2000, p.199). The UN Global Compact is a sign of changing tides but as outlined on their website, it is a ‘voluntary corporate responsibility initiative’ and so relies on the morality of a TNC to participate. However it is impossible for an artificial being to experience such a feeling.

Bakan’s The Corporation gives an insight into how these economic factors, together with the lack of legal human rights obligations, have led TNCs to commodify workers’ time and productivity in what has been described by Charles Kernaghan as the “science of exploitation” (Bakan, 2004, p.66). In the Dominican Republic the sports brand, Nike, was found to be calculating down to ten thousandths of a second how fast their employees could create a garment and dividing up their wages accordingly down to the last cent per second (ibid.). There is no indication that the employees are considered humans, so much as ‘human resources’ (Bakan, 2004, p.69). This dehumanising transformation of employees from human beings into ‘human capital’ is also evident in the process of human trafficking for labour exploitation (Turner and Kelly, 2009, p.191). In October 2012 Tesco, Asda and McDonald’s, amongst other TNCs working in the UK, were found to be buying eggs from a company using trafficked Lithuanian migrants (Lawrence, 2012). Corporations such as these have enough power and resources to properly monitor where they source their produce and to ensure good practice as each stage of the supply chain but they simply don’t because within them there is no morally conscience decision-maker to do so.

We can further develop this idea that humans are commodified by corporations by arguing that as a result, we are witnessing a form of ‘commodity fetishism’. A term introduced by Marx in The Fetishism of Commodities and the Secret There Of, commodity fetishism refers to the process by which the value added to a commodity- in this case, an employee/seasonal worker- renders it (the exploited/trafficked victim) invisible (Billig, 1999). Ghandi described this as ‘commerce without conscience’ (Cragg, 2000, p.14). As the worker is not considered a human, his or her (“its’”, in the eyes of a TNC) rights are not fully realised. They don’t benefit from international labour standards as outlined by the International Labour Organisation (ILO) and are often considered disposable. Increased corporate power is a crucial driver in this process of commodification which results in the far less than adequate realisation of employee rights.

WATER: THE VALUE OF A PUBLIC GOOD

The Committee on Economic, Social and Cultural Rights’ General Comment No. 15 on the Right to Water (General Comment No. 15) defined water as ‘a public good fundamental for life and health’ (ECOSOC, 2002, p.1). It is so vital to humans it was further described as a ‘prerequisite for the realization of other human rights’ (ibid.). Legal codification isn’t needed to know this of course but it’s interesting that it was deemed necessary. How and why, then, have corporations been able to commodify this universal necessity for their own profit, depriving so many of the realisation of this right in the process? The answer is simple- because they can.

Coca-Cola, one of the most famous symbols of corporate globalisation did just that. Due to low water extraction costs and minute taxes, Coca-Cola set up plants in the south of India to make soft drinks (Aiyer, 2008, p.642). It takes 3 litres of water to make just 1 litre of soft drink. The water table eventually dropped because water is a limited resource and in 2005 the area was declared ‘water impoverished (2008, p.645). Coca-Cola hadn’t broken the law, though. The intellectual authors who were responsible in Coca-Cola had the protective right of limited liability and the corporation had no international legal personality and so had no obligations under international human rights law to consider their impact on the realisation of the right to water of the current local population or of the future generations who will also be deprived this right (General Comment 15, 2002, p.5). Water was seen by Coca-Cola only as an economic good.

Coca-Cola is, of course, not the only offender, especially when it comes to water wastage. Companies in the energy industry are also guilty. Hydraulic fracturing or “fracking” involves pumping pressurised water, sand and chemicals into rock to release shale gas. It is a controversial form of energy extraction with severe social and ecological effects. One of these is the use of vast amounts of water to extract a relatively small amount of gas- 1 to 8 million gallons of water per fracking well (Fox, 2010). Water contamination is another dangerous result of this process. In their “dash for gas” corporations (and governments) are again externalising the impact of their actions on the realisation of human rights. With regards to the right to water, the undermining of this human right was again considered the ‘unavoidable price of economic development’ (Stevens, 2012, p.48) by TNCs. This approach to development lacks the human morality vital for the global realisation of human rights. Furthermore because humans literally cannot survive without water, by commodifying water, corporations are again commodifying humans themselves.

GENE PATENTING: THE VALUE OF ‘YOU’

The last area of human rights to be analysed in this paper is that of health and medicine, both in terms of the legal rights and in the wider conceptual sense. The contentious issue of gene patenting will be explored to further support the argument that TNCs dehumanise humans by commodifying them or certain aspects of their being. TNCs are taking advantage of their rights as legal “persons” to create the legal spaces that allow them to do this and, with regards to gene patenting, the potential risks to the realisation of human rights are endless and go beyond the scope of the current human rights conventions . There are huge implications on the universality of these rights to healthcare and medicine within developed countries and between the global North and South as well.

The expansion of intellectual property rights with the World Trade Organisation (WTO) agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an example of this. Abbott looks at how the TRIPS agreement has facilitated in allowing one company, Myriad Genetics, to patent breast and ovarian cancer genes (2012, p.498). The court case centres on the argument of whether or not manipulated genes are products of man or nature. Patenting these genes would affect patients’ accessibility to breast and ovarian cancer treatment and this outright violates the human rights principle of universality. Additionally, when genes are patented, the body is being exploited for economic gain. This was likened to slavery in a similar gene patenting court case (2012, p.515).

While this is perhaps slightly farfetched, the observation is an interesting and valid one. Legal developments are showing a move towards the commodification of every aspect of human life, including the genes we are made of. The Universal Declaration on the Human Genome and Human Rights defines genes as the ‘heritage of humanity’. Yet they are being patented and traded like any other good on the international market. Medicines essential for the ‘highest attainable standard of living’ (United Nations, 1976, Article 12) are not accessible or affordable to all so the ‘right of everyone to enjoy’ these cannot be fully realised (ibid.). The growing power and influence of TNCs allows them to put a price on health, a price that many individuals and states in the global South cannot afford.

In addition to the dehumanising effect of gene patenting, the clear intentions of TNCs to prioritise intellectual property rights over the basic human rights of others are also evident. In a legal scenario we are witnessing the rights of a legal person placed in opposition with those of an existential person (d’Errico, 1997). It is nonsensical that those of a corporation are being realised rather than those of a human being. The removal of human morality from the work and conscience of TNCs, as we have seen, has negative implications on the realisation of human rights of those affected. As Elson argues, what is needed is the creation of market institutions that ‘enable us to relate to one another as human beings possessing human rights, rather than as opportunities for profit’ (2004, p.60).

CONCLUSION

This paper has analysed these three areas of human rights to demonstrate that growing corporate power and influence has, and will continue to have, a negative effect on the realisation of human rights unless there are legal instruments in place to prevent this. TNCs have been allowed to commodify what people do (labour exploitation), what people need to survive (water) and even what they’re made up of (gene patenting). Legally bound to maximise profits and protected behind the “veil” of limited liability, TNCs have little, if any, regard for human rights as has been shown throughout this paper. As legal persons, TNCs have ‘no soul to be damaged and no body to be kicked’ (Bakan, 2004, p.79), unlike those who rights they violate.

Cragg reiterates this and calls for a new ‘social contract’ (2000, p.3) whereby the foundations of the market place are driven by ethics rather than profits. Bakan reiterates this saying that ‘in the search for wealth we created a thing that will destroy us’ (2004, p.71). As we have seen, this can be literal. Economic globalisation holds such potential to improve the international realisation of human rights by TNCs. The increased ability to exchange information, goods and services at a global level is being exploited rather than utilised. As mentioned at the beginning of this paper, the economic power of some TNCs is larger than most states and with power comes responsibility and the need for monitoring and accountability.

Voluntary initiatives such as the UN Global Compact are a step in the right direction but are more of a PR opportunity than a genuine solution. A key problem with the UNGC is that it’s not legally binding and doesn’t address that fact that TNCs are economically motivated. This reiterates Cragg’s point that a complete re-evaluation of how TNCs work is needed (2000, p.11). International instruments would help TNCs to encourage rather than weaken the realization of human rights (Elson, 2004, p.60). The protection of limited liability must also be removed. If violating human rights continues with impunity for TNCs, they have no incentive to stop.

Progress has been made but while TNCs are legally bound to maximise profit, rather than respect, protect, promote and fulfil human rights, they won’t. They must be legally bound, as states are, to not only refrain from committing human rights violations, but to recognise their positive duties and take steps to protect the human rights of those employees, local communities, future generations and any other individual whose rights are impacted by the actions of a TNC.

Commission on Human Rights, (2000) The Realization of Economic, Social and Cultural Rights- The Question of Transnational Corporations, Sub-Commission on the Promotion and Protection of Human Rights, E/CN.4/Sub.2/2000/12, Geneva

Cragg, W. (2000) ‘Human Rights and Business Ethics: Fashioning a New Social Contract’, Journal of Business Ethics 27(1-2): pp. 205-214

Elson,D. (2004) ‘Human Rights and Corporate Profits: the UN Global Compact- Part of the Solution or Part of the Problem?’, in Bernia, L. and Bisnath, S. (eds) GlobalTensions: Challenges and Opportunities in the Global Economy, London: Routledge.

United Nations Economic and Social Council ECOSOC (2002) Committee on Economic, Social and Cultural Rights, General Comment 15, The right to water (Twenty-ninth session, 2003), U.N. Doc. E/C.12/2002/11